Service Tax applicablity on freight, Service Tax

[Arun Kumar Soni]

A private limited manufacturing firm sends its goods to other Pvt. Limited firm. Freight is paid by first private limited, and the said freight is reimbursed by second private limited firm after deducting TDS under section 194C.

(A) who will be liable to pay service tax.

(B) will the general exemption of 10 Lakh be allowed, if yes then how.

Total Amount deducted by second private limited under section 194C is in FY : 26 Lakh

How will exemption of 10 Lakh be allowed, will it be

(i) 26*25% = 6.5 Lakh will is less than general exemption of 10 Lakhs, no liablity to pay service tax.

Or (ii) 26 Lakh - 10 Lakhs = 16 Lakh .. 16*25%*12.36% ....

Pls reply......

Posts / Replies

[SHIVKUMAR SHARMA]

A. Company who Paid the Freight amount to the Transporter.In your case First Pvt Ltd co.

B No.

[KASTURI SETHI]

Perfect reply by Sh.Shiv Kumar Dharma, an expert. No threshold exemption to GTA under RCM since its levy.

[YAGAY and SUN]

If GTA charges GST then no reverse charge would be applicable.

[KASTURI SETHI]

Yes, Sir. It is also a factual legal position.

[Ganeshan Kalyani]

Gst is paid by the person paying freight amijnt.

[DR.MARIAPPAN GOVINDARAJAN]

What is the relevant period? Pre GST or post GST?

[Ganeshan Kalyani]

post gst also, in my view the liability is cast on the person making freight payment.